Notes to Accounts of Pudumjee Paper Products Ltd.

Mar 31, 2019

Note 1 : General Information

Pudumjee Paper Products Limited (the “Company”) The Company, mainly belongs to Paper Industry and operates in Speciality Paper segment for Wrapping and Food Grade Packaging Paper, household and Sanitary Paper etc. The Company’s manufacturing facilities located at Thergaon, Pune produces wide range of Speciality Papers of varying basis weight and is ably supported by a dedicated team and country wide network of distribution channels. Manufacturing tailor made products of varying properties to suit various applications in a short and committed period of delivery is Company’s hallmark. Such applications (with more possibilities for inclusion), can be broadly categorized as 1) Opaque Laminating Base used for Laminating, printing, packaging, Chocolate and Toffee wrapping 2) Glassine for packing of food products soaps etc. 3) Base paper for melamine tableware, Paper for decorative laminates for furniture 4) Bible Printing Paper used in Printing of Bible, Dictionary, Books, pharma leaflets (inserts & outserts) 5) Vegetable parchment paper for packing of butter, cheese etc. 6) Kraft paper used as release liner for labels, Interleaving for steel and Glass industry etc. 7) Tissue paper used as napkins, kitchen towel, Toilet rolls products and several others.

The Hygiene Products Division of the Company markets its Away-from-Home converted tissue products such as Bathroom roll, Kitchen towel, Napkins, dispensers etc. under well received brand name ‘Greenlime’ and mainly focuses on institutional buyers, comprising Luxury Hotels, Airports, Corporate Offices etc.

The Company is public limited company and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The financial Statements were authorised for issue in accordance with resolution passed by the Board of Directors of the Company on May 24, 2019.

NOTE 2 (a) : Capital Work in Progress

Capital Work in progress mainly includes building & machinery at Mahad and new projects at Pune plant.

NOTE 2 (b) : Property, plant and equipment hypothicated as security

Refer to note 10(a) for information on property, plant and equipment hypothecated as security by the company.

NOTE 2 (c) : Contractual obligations

Refer to note 29(a) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

* This investment represent investment in class A equity shares of Sai Wardha Power Generation Limited (SWPGL), that gives the Company entitlement to purchase power from SWPGL. As per the share purchase agreement, the Company cannot sell these shares to any person without prior written approval from KSK Energy Ventures Limited (KSK,holding company of SWPGL). Further at the time of completion/termination of the power supply agreement, SWPGL either will arrange the buy-back of these shares or will arrange to transfer the shares to KSK’s nominee for a total consideration that is equal to its cost of acquisition to the Company (i.e. Rs. 10/- per share). Hence, for the Company the fair value of this investment is same as its cost/carrying amount.

Amounts recognised in profit or loss:

Write-downs of inventories to net realisable value amounted to Rs.Nil (31 March 2018 Rs. 96.69). These were recognised as an expense during the year and included in ‘(increase)/decrease in inventories’ in statement of profit and loss.

In January 2019, the management of the Company decided to sell certain items of machines that were used for paper manufacturing. The sale is expected to be completed within a year. The assets are presented within total assets of the Paper manufacturing segment.The machineries classified as held for sale during the reporting period are measured at its carrying amount, being lower than fair value less costs to sell at the time of the reclassification. The fair value of the machines was determined using the comparative price approach. This is a level 2 measurement as per the fair value hierarchy set out in fair value measurement disclosures (note 23). The key inputs under this approach are price of new item of equivalent machinery, adjusted for it’s condition & residual life.

(iii) Terms/Rights attached to Equity Shares :

The Company has only one class of equity shares having a par value of Rs. 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note 2 (d) : Reserves and surplus - Additional disclosures

(i) Securities premium reserve:

Securities premium reserve is used to record premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(ii) General Reserve:

General Reserve is a free reserve and it represents amount transferred from retained earning.

(iii) Capital reserve:

Capital reserve was created on account of demerger, as per scheme approved by High court.

(iv) Retained earnings:

Retained earnings comprises of the Company’s undistributed earnings after taxes.

Notes :

a) Term loan - 1 carries interest at (Prime lending rate) PLR - 4.75% p.a. Loan amount is repayable in quarterly instalments of Rs. 125 lakhs (excluding interest) starting from February 2014 till November 2018.

b) Term loan - 2 carries interest at (Prime lending rate) PLR - 4.75% p.a. Loan amount is repayable in 11 quarterly instalments of Rs. 166.80 lakhs (excluding interest) starting from July 2017 till November 2018 and last instalment of Rs. 165.20 lakhs in April 2020.

c) Term loan - 3 from banks carries interest at (Prime lending rate) PLR -6.10 % p.a. Loan amount is repayable in equated quarterly installments after a moratorium period of 24 months from 1st disbursement. The term loan is secured by certain immovable properties to be purchase using this loan.

d) Term loan - 4 carries interest at (Prime lending rate) PLR - 4.40% p.a. Loan amount is repayable in 20 quarterly instalments of Rs. 25.00 lakhs (excluding interest) starting from November 2018 till November 2023.

e) Term loan - 5 carries interest at (Prime lending rate) PLR - 4.90% p.a. Loan amount is repayable in 11 quarterly instalments of Rs. 106.25 lakhs (excluding interest) starting from September 2020 till March 2023 and last instalment of Rs. 90.00 lakhs in June 2023.

f) Term loan - 6 carries interest at (Prime lending rate) PLR - 4.90% p.a. Loan amount is repayable in 20 quarterly instalments starting from December 2019. The loan is secured against hypothication of plant & machinery purchased therefrom.

g) Term loan - 1, Term loan-2, Term Loan-4 & Term Loan -5 are secured by first pari passu charge of all plant & machinery (both present and future) and immovable properties of the Company.

h) Vehicle loan 1 carries interest @ 10.70% p.a. Loan amount is repayable in 59 monthly instalments of Rs. 0.81 lakhs (including interest) from January 2014. Vehicle loan 2 carries interest @ 8.97% p.a. Loan amount is repayable in 60 monthly instalments of Rs. 3.42 lakhs (including interest) from February 2017. Vehicle loan 3 carries interest @ 9.22% p.a. Loan amount is repayable in 37 monthly instalments of Rs. 1.37 lakhs (including interest) from February 2019.The vehicle loans are secured against the respective vehicles.

i) Public deposits : Public Deposits are unsecured deposits accepted from public, in compliance with provisions of Companies Act, 2013. The rate of interest is 9 % to 10 % p.a (31-03-2018 9% to 10%).

j) Deferred sales tax loan : Deferred sales tax loan is interest free loan from the Government

Notes:

a) Working capital loan from banks is secured by first pari passu charge on entire current assets of the Company (both present and future) and second pari passu charge on all fixed assets of the Company and corporate guarantee of 3P Land Holdings Limited (formerly Pudumjee Industries Limited). The loans are repayable on demand and carries interest @ 9.55% - 10.50% p.a.

b) Unsecured loans from related parties and others are repayable on demand and carries interest @ 11.25% (31-03-2018 11.25% p.a.)

Note : Information about individual provisions

(i) Provision against litigation:

Provision for disputed statutory liabilities comprises electricity duties matters under litigation with Electricity department, government of Maharashtra.

The amount of provisions made by the Company is based on the estimates made by the Management considering the facts and circumstances of each case. To the extent the Company is confident that it has a strong case, that portion is disclosed under contingent liabilities.

The timing and the amount of cash flows that will arise from these matters will be determined by the Appellate Authorities only on settlement of these cases.

(ii) Other provision :

Other provision is for probable liability of electricity duty on power generated by the company. As on balance sheet date no demand has been raised on the company , but on prudent basis a provision has been recognised in compliance with Ind AS 37. The management estimates that no cash outflow is expected within 12 months from the balance sheet date, hence entire provision is classified as non current.

(i) Leave obligations :

The leave obligation covers the Company’s liability for accumulated leaves that can be encashed or availed. The company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly amounts have been classified as current and non current based on actuarial valuation report.

(ii) Defined benefit plans:

a Gratuity - The Company provides for gratuity for employees as per the terms of employment. Employees who are in continuous service at least for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is calculated at the last drawn monthly basic salary multiplied by 15 days salary for each completed years of service of the employee. The scheme is funded with Life Insurance Corporation of India (LIC).

In addition, employees who have completed 20 years of service are eligible to additional gratuity computed at last drawn monthly basic salary multiplied by 7 days salary for each completed years of service of the employee. The additional gratuity benefit is unfunded.

Pension - The Company operates defined benefit pension plan for the Managing Director. The amount of pension per month is a fixed amount. The benefit is payable to the Director after he retires and is payable during his life time and thereafter is payable to his spouse, if she is alive . The Company has not funded the liability.

The net liability disclosed above relates to funded plans. The Group has no legal obligation to settle the deficit in the funded plans with an immediate contribution or additional contribution. The Group intends to contribute in line with the recommendations of the fund administrator and the actuary.

** One employee (Executive director-Mr.A.K.Jatia) has been transferred from payroll of AMJ Land Holdings Limited to payroll of the company during the year on August 1, 2018.

ab As at March 31, 2018 and March 31, 2019, plan assets were primarily invested in insurer managed funds. ac Through its defined benefit plans, the group is exposed to number of risks, the most significant of which are detailed below:

Asset Volatility: The Plan liabilities are calculated using a discount rate set with reference to government bond yields. If plan assets underperform, this yield will create a deficit. The plan asset investments are in funds managed by insurer. These are subject to interest rate risk.

Changes in bond yield: A decrease in government bond yields will increase plan liabilities, although this may be partially offset by an increase in the returns from plan asset.

Defined benefit liability and employer contributions:

ad The Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the employee benefit plans. Within the framework, the Company’s ALM objective is to match assets to the gratuity obligations by investing in funds with LIC in the form of a qualifying insurance policy.

The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the process used to manage its risks from previous periods.

ae The Group expects to contribute Rs. 482 lakhs to the defined benefit plan during the next annual reporting period.

The expected benefits are based on the same assumptions used to measure the Group’s benefit obligations as of March 31, 2019.

b Provident fund : The Group makes contribution towards provident fund which is administered by the trustees. The contributions to the trust managed by the Company is accounted for as a defined benefit plan as the Company is liable for any shortfall in the fund assets based on the government specified minimum rates of return as provided under Para 60 of the Employees Provident Fund Scheme, 1972. The Group has obtained an actuarial valuation of the liability according to which there is no deficit as at the Balance Sheet Date. The liability therefore is restricted to monthly contributions. The details of fund and plan assets are given below:

* Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

** The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.

*** The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.

(iii) Defined contribution plans:

The Company also has certain defined contribution plans. Contributions are made to recognised funds for employees at the prescribed rate of basic salary as per regulations. The contributions are made to registered funds administered/approved by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. In respect of these plans, contributions paid and recognised in the Statement of Profit and Loss are as follows:

Contract liability i.e. the Company’s obligation to transfer goods to customers for which the Company has received consideration from the customers of Rs. 160.81 lakhs ( March 31,2018: Rs. 120.70 lakhs) is included in Advance from customers.

During the year ended March 31, 2019 the company recognized revenue of Rs. 120.70 lakhs arising from opening Contract liability as of April 1, 2018.

In accordance with the requirements of Ind AS, revenue for the year ended March 31, 2019 is net of Goods and Services Tax (‘GST’). However, revenue for the period April 1, 2017 to June 30, 2017 is inclusive of excise duty of Rs. 690.52 lakhs and revenue for the period July 1, 2017 to March 31, 2018 is net of GST.

NOTE 3(A): CORPORATE SOCIAL RESPONSIBILITY EXPENDITURE

The Company has spent an amount of Rs. 55 lakhs (March 31, 2018 : Rs. 25 lacs) during the year, by way of contribution to M.P.Jatia Charitable Trust as required under section 135 of the Companies Act, 2013.

NOTE 3(B):

During the year, the Company has capitalised borrowing costs of Rs. 107.17 lakhs (March 31, 2018: Nil) incurred on the borrowings specifically availed for purchase of residential premises and expansion of production facilities @ 8.30% & 9.50 % p.a respectively. The interest expense disclosed above is net of the interest amount capitalised.

(i) Fair value hierarchy:

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

The following table provides the fair value measurement hierarchy of the Company’s financials assets and liabilities that are measured at fair value or where the fair value disclosure is required.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all mutual funds are arrived at by using closing Net Asset Value published by the respective mutual fund houses.

Level 2: Fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument as observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable data, the instrument is included in level 3.

(ii) Valuation technique used to determine fair value

The following methods and assumptions were used to estimate the fair value of the level 3 financial instruments included in the above tables:

The investment in unquoted equity instrument represents investment in class A equity shares of Sai Wardha Power Generation Limited (SWPGL). The investment have some restrictions as per the Share purchase agreement including restriction on sale of these investments to any third party. The fair value arrived at is after taking into account the relevant terms and condition of the Share purchase agreement. Also refer note 4(a) for details.

(iii) As per Ind AS 107 “Financial Instrument: Disclosure”, fair value disclosures are not required when the carrying amounts reasonably approximate the fair value. Accordingly fair value disclosures have not been made for the following financial instruments:-

1. Trade receivables

2. Cash and cash equivalent

3. Other bank balances

4. Security deposits

5. Interest accrued on deposits

6. Borrowings

7. Trade payables

8. Capital creditors

9. Unpaid dividends

10. Employee dues

11. Book overdrafts

12. Other payables

NOTE 4 : FINANCIAL RISK MANAGEMENT

The Company’s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company’s senior management has the overall responsibility for establishing and governing the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

a. MANAGEMENT OF CREDIT RISK

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and other financial instruments.

i) Trade receivables:-

Trade receivables are generally unsecured, except for export sales which are generally covered by letters of credit and some parties in Hygiene division where security is obtained in the nature of bank guarantee. Customer credit risk has always been managed by the company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis for major customers. The Company evaluates the customer credentials carefully from trade sources before appointment of any distributor and only financially sound parties are appointed as distributors. The Company secures adequate deposits from its distributor and hence risk of bad debt is limited. The credit outstanding is sought to be limited to the sum of advances/deposits and credit limit determined by the company. The company have stop supply mechanism in place in case outstanding goes beyond agreed limits.

To measure the expected credit loss, trade receivables have been grouped based on the days past due. The expected loss rates are based on the payment profiles of sales over a period of 36 months before the reporting date and the corresponding credit loss experienced within this period. The historical loss rates are adjusted to reflect current and forward looking information on macroeconomic factors such as expected industry growth, GDP, unemployment rate etc. affecting the ability of the customer to settle the receivables.

The company’s credit period generally ranges from 15-60 days

During the period, the Company made no write-offs of trade receivables. It does not expect to receive future cash flows or recoveries from receivables previously written off.

ii) Other financial assets:-

Credit risk on cash and cash equivalents is limited as the company generally invests in deposits with banks and financial institutions with high credit ratings assigned by domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units, carried at fair value. Other financial assets that are potentially subject to credit risk consists of lease deposits and inter corporate loans. The Company charges interest on such loans at arms length rate considering counter party’s credit rating. The Company assesses the recoverability from these financial assets on regular basis. Factors such as business and financial performance of counterparty, their ability to repay, regulatory changes and overall economic conditions are considered to assess future recoverability. An impairment analysis is performed at each reporting date on an individual basis. The Company does not hold collateral as security. During the year, the company made additional provision of Rs. 7.62 lakhs for doubtful deposits and other financial assets. Based on assessment performed management has concluded that impact of expected credit loss is not material and current provision made against Loans and Other financial assets is adequate to cover the provision on account of expected credit loss. The Company’s maximum exposure to credit risk is the carrying value of each class of financial assets.

b MANAGEMENT OF LIQUIDITY RISK

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses or risking damage to company’s reputation. In doing this, management considers both normal and stressed conditions.

Management monitors the rolling forecast of the company’s liquidity position on the basis of expected cash flows. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents.

The company has access to funds from debt markets through loan from banks. The company invests its surplus funds in bank deposits and debt based mutual funds.

c MANAGEMENT OF MARKET RISK:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of fluctuation in market prices. These comprise three types of risk i.e. currency rate, interest rate and other price related risks. Financial instruments affected by market risk include loans and borrowings, deposits, financial assets and liabilities in foreign currency, investments in quoted instruments and derivative financial instruments. Regular interaction with bankers, intermediaries and the market participants help us to mitigate such risk.

i) Foreign currency risk

The primary market risk to the Company is foreign exchange risk. After taking cognisance of the natural hedge, the company selectively takes hedges to mitigate its risk resulting from adverse fluctuations in foreign currency exchange rate(s).

When a derivative is entered into for the purpose of hedge, the Company negotiates the terms of those derivatives to match the terms of the underlying exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

The company uses foreign exchange forward contracts to hedge its exposure in foreign currency risk. During the year ended March 31, 2019, the company did not have any hedging instruments with terms which were not aligned with those of the hedged items.

ac Sensitivity

For the year ended March 31, 2019 and March 31, 2018, every percentage point appreciation/depreciation in the exchange rate would have affected the Company’s operating margins respectively:

- INR/USD by approximately 1.36% and 1.46%

- INR/CHF by approximately Nil and 0.01%

- INR/EUR by approximately Nil and 0.00%

Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into reporting currency, due to every percentage point appreciation/depreciation in the exchange rates.

ii) Interest rate risk exposure

Interest rate risk is the risk that the fair value or future cash flows on a financial instrument will fluctuate because of changes in market interest rates. The management is responsible for the monitoring of the company’s interest rate position. Various variables are considered by the management in structuring the company’s investment to achieve a reasonable, competitive cost of funding.

iii) Price Risk and Sensitivity:

The Company is mainly exposed to the price risk due to its investment in debt mutual funds. The price risk arises due to uncertainties about the future market values of these investments. As on 31-Mar-19, the investments in debt mutual funds amounts to Rs. 2219.03 lacs (31-Mar-18 : Rs. 1872.18). These are exposed to price risk.

The Company has laid policies and guidelines which it adheres to in order to minimise price risk arising from investments in debt mutual funds.

A 1% increase in prices would have led to approximately an additional Rs. 22.19 lacs gain in the Statement of Profit and Loss (2017-18 : Rs. 18.72 lacs gain). A 1% decrease in prices would have led to an equal but opposite effect.

NOTE 5 : CAPITAL MANAGEMENT

(a) Risk management

The Company’s capital comprises equity share capital, share premium, retained earnings and other equity attributable to equity holders.

The Company’s objectives when managing capital are to :

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. Net debt comprises of long term and short term borrowings less cash and bank balances. Equity includes equity share capital and reserves that are managed as capital.

NOTE 6 : SEGMENT INFORMATION

The Board of Directors examines the Company’s performance based on the products and geographic perspective and has identified below mentioned reportable segments of its business as follows:

Paper : The Paper segment relates to manufacturing (including processing) and marketing of various types of speciality papers, consisting Opaque Laminating Base, Glassine, Base paper, Bible Paper, etc.

Hygiene products: The Hygiene products segment relates to processing/trading and marketing of tissue and other hygiene papers as well as marketing and distribution of other hygiene products.

Segment Revenue, Result, Assets and Liabilities include the respective amounts identifiable to each of the segments and amount allocated on a reasonable basis. Unallocated expenditure/income consist of common expenditure incurred for all the segments and expenses incurred or interest/investment income earned at corporate level. The assets and liabilities that cannot be allocated between the segments are shown as unallocated assets and unallocated liabilities respectively.

The accounting policies of the reportable segments are the same as the Company’s accounting policies described in Note 2. The operating segments reported are the segments of the Company for which separate financial information is available. Profit before tax (PBT) are evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. The Company’s financing (including finance costs and finance income) and income taxes are reviewed on an overall basis and are not allocated to operating segments. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

(d) The Company has been purchasing power (i.e. electricity) from Sai Wardha Power Generation Limited (SWPL) since June 2016 under the Group Captive mechanism. Any purchase of power under Group Captive mechanism is exempt from the levy of Cross Subsidy Surcharge (CSS) and Additional Surcharge (ASC) subject to certain conditions.

In respect of the power supply availed by the Company from SWPL, the Maharashtra State Electricity Distribution Company Limited (MSEDCL) had levied in the bill raised on the Company CSS and ASC for financial year 2016-17 of Rs. 716.98 lakhs and 2018-19 (till October 2018) of Rs. 863.39 lakhs and the same is sub judice being disputed before appropriate authorities. In terms of the interim stay granted for 2018-19 by Appellate Tribunal for Electricity (APTEL) the Company was required to deposit Rs. 431.70 lakhs being 50% of CSS and ASC for the Financial Year 2018-19 while staying the demand for that year.

Further in terms of the Power delivery agreement with SWPL, if CSS/ ASC is ever imposed for any reason whatsoever then SWPL shall, at its own cost and consequences, approach the appropriate Forum/ Courts as may be considered appropriate by SWPL until the levy is finally and absolutely confirmed by such Court/Forum. If CSS/ ASC is levied on or directly or indirectly borne by the Company it would be forthwith reimbursed to the Company by SWPL or the Company will deduct the same from the amounts payable to SWPL.

As on date SWPL has become a subject matter of Insolvency and Bankruptcy Code wide an order of National Company Law Tribunal, Hyderabad. The Resolution process of SWPL is not yet completed and the Company’s claims of CSS/ ASC from SWPL have been rejected by the Resolution Professional of SWPL, on the ground that the claims are sub judice.

In view of the nature of dispute and merits of the case, the Company does not envisage an ultimate liability for these amounts and accordingly as on balance sheet date no provision had been made in books for the same.

(b) Non-cancellable operating leases

The Group has taken on lease certain facilities and equipment under operating lease arrangements that expire over the next five years. Rental expense incurred by the Company under operating lease agreements totalled approximately Rs. 233.43 lakhs ( March 31, 2018 Rs. 141.09 lakhs)

NOTE 7: IMPAIRMENT

(a) Goodwill has arisen as per the Scheme of arrangement and reconstruction(demerger) approved by high court dated January 8, 2016. Goodwill reflects the difference between the fair value of shares issued and all the net assets transferred at carrying value under the scheme. The management monitors goodwill at the company level by considering entire business. Consequently goodwill is not allocable to any segment or cash generating unit.

Goodwill is tested for impairment at least annually in accordance with the Company’s procedure for determining the recoverable value of the entire business of the company.

(b) The recoverable amount is the higher of its fair value less cost to sell and its value in use. The fair value is determined based on market capitalization while the value in use is determined based on specific calculations. These calculations use pre-tax cash flow projections for the company over a period of 5 years. An average of the range of each assumption used is mentioned below. The recoverable amount was computed based on value-in-use being higher than fair value and the carrying amount of the total assets . The key assumptions used for the calculations are as follows:

(c) Based on the above, no impairment was identified as of March 31, 2019 as the recoverable value exceeded the carrying value. An analysis of the calculation’s sensitivity to a change in the key parameters (revenue growth, operating margin, discount rate and long-term growth rate) based on reasonably probable assumptions, did not identify any probable scenarios where the recoverable amount would fall below its carrying amount.

NOTE 8 : IMPACT OF CHANGE IN ACCOUNTING POLICY

The Company has adopted Ind AS 115 Revenue from contract with Customers, from April 1, 2018. However, this has not resulted in any impact on the revenue recognised for current year or previous year. Additional disclosures as required under Ind AS 115 have been made in the financial statement presented. Comparative amounts presented have been re-grouped to align with current year’s presentation and disclosures.

NOTE 9 : RECLASSIFICATION

Previous year figure’s have been reclassified to conform to this year’s classification.

---

Mar 31, 2018

NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2018

(An amounts in INR Lakhs unless otherwise stated)

NOTE 30 : EARNINGS PER SHARE
	31.03.2018	31.03.2017
Diluted Earnings Per Share
Weighted average number of equity shares	949.50	949.50
Outstanding for diluted EPS Diluted EPS (Rs)	2.02	2.17

NOTE 31 : FIRST TIME ADOPTION OF IND AS

These are the company''s first financial statement prepared in accordance with Ind AS. For periods up to and including the year ended 31st March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP or Indian GAAP). The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1st April 2016 (Company''s transition date). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with Privious GAAP. An explanation of how the transition from previous GAAP to Ind AS has affected the comapnies financial performance and cash flows is set out in the following tables and notes.

Ind AS 101 allows first-time adopters certain exemptions/exception from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions/exception:

(a) Exemptions from full retrospective application: aa Business combinations :-

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

ab Deemed cost:-

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its Property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities This exemtion can also be used for Intangible assets covered by Ind AS 38.

Accordingly, the Company has elected to measure all of its Property, plant and equipment and Intangible assets at the Previous GAAP carrying value as on transition date.

ad Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.

(b) Mandatory exceptions: ba (i) Estimates

An entity''s estimate on the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1st April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVPL ;

- Investment in mutual funds carried at FVPL;- Impairment of financial assets based on expected credit loss model; and

- Fair valuation of financial assets and liabilities

bb (ii) Derecognition of financial assets and financial liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS -109 retrospectively from a date of the entity''s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

be (iii) Classification and measurement of financial assets :-

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

(c) Reconciliations between previous GAAP and Ind AS

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:

- equity as at April 1, 2016;

- equity as at March 31, 2017;

- total comprehensive income for the year ended March 31, 2017; and

- explanation of material adjustments to cash flow statements.

In the reconciliations mentioned above, certain reclassifications have been made to Previous GAAP financial information to align with the Ind AS presentation.

ca Reconciliation of equity as at April 1, 2016

	Notes to first time adjustment	Amounts as per previous GAAP	Effect of transition to Ind AS	Amount as per Ind AS
Assets
Non current assets
(a) Property, plant and equipment		9,302.10	-	9,302.10
(b) Capital work-in-progress		5,775.25	-	5,775.25
(c) Goodwill		7,793.05	-	7,793.05
(d) Other intangible assets		2.87	-	2.87
(e) Intangible assets under development		100.85	-	100.85
(f) Financial assets
i. Loans		-	-	-
ii. Other financial assets		19.72	-	19.72
(g) Other non-current assets		89.87	-	89.87
Total non-current assets		23,083.71	-	23,083.71
Current assets
(a) Inventories		10,083.00	-	10,083.00
(b) Financial assets
i. Investments		-	-	-
ii. Trade receivables		5,917.87	-	5,917.87
ill. Cash and cash equivalents		414.00	-	414.00
iv. Bank balances other than in (iii) above		9.00	-	9.00
v. Loans		276.23	-	276.23
vi. Other financial assets		96.68	-	96.68
(c) Other current assets		1,772.56	-	1,772.56
(d) Advance Income tax (net)		325.81	-	325.81
(e) Assets classified as held for sale		893.23	-	893.23
Total current assets		19,788.38	-	19,788.38
Total assets		42,872.09	-	42,872.09
Equity and liabilities
Equity
(a) Equity share capital		949.50	-	949.50
(b) Other equity
i. Reserves and surplus	1	19,540.00	137.35	19,677.35
Total equity		20,489.50	137.35	20,626.85
Non-current liabilities
(a) Financial liabilities
i. Borrowings	4	6,545.46	(36.91)	6,508.55
(b) Provisions		289.80		289.80
(c) Employee benefit obligations		1,005.65	-	1,005.65
(d) Deferred tax liabilities		1,205.37	12.77	1,218.14
Total non-current liabilities		9,046.28	(24.14)	9,022.14
Current liabilities
(a) Financial liabilities
i. Borrowings		2,402.14	-	2,402.14
ii. Trade payables		6,159.49	-	6,159.49
iii. Other financial liabilities		3,733.20	-	3,733.20
(b) Employee benefit obligations		221.34	-	221 .34
(c) Other current liabilities		820.14	(113.21)	706.93
Total current liabilities		13,336.31	(113.21)	13,223.10
Total liabilities		22,382.59	(137.35)	22,245.24
Total equity and liabilities		42,872.09	-	42,872.09

cb Reconciliation of equity as at March 31, 2017

	Notes to first time adjustment	Amounts as per previous GAAP	Effect of transition to Ind AS	Amount as per Ind AS
Assets
Non current assets
(a) Property, plant and equipment		11,156.38	-	11,156.38
(b) Capital work-in-progress		4,789.37	-	4,789.37
(c) Goodwill		7,793.05	-	7,793.05
(d) Other intangible assets		1.38	-	1.38
(e) Intangible assets under development		26.59	-	26.59
(f) Financial assets
i. Loans		-	-	-
ii. Other financial assets		21.21	-	21.21
(g) Other non-current assets		152.88	-	152.88
Total non-current assets		23,940.86	-	23,940.86
Current assets
(a) Inventories		5,330.53	-	5,330.53
(b) Financial assets
i. Investments		2,500.01	-	2,500.01
ii. Trade receivables		5,933.90	-	5,933.90
ill. Cash and cash equivalents		626.06	-	626.06
iv. Bank balances other than in (iii) above		227.01	-	227.01
v. Loans		0.96	-	0.96
vi. Other financial assets		90.50	-	90.50
(c) Other current assets		1 ,599.79	-	1,599.79
(d) Advance Income tax (net)		209.52	-	209.52
(e) Assets classified as held for sale		139.94	-	139.94
Total current assets		16,658.22	-	16,658.22
Total assets		40,599.08	-	40,599.08
Equity and liabilities
Equity
(a) Equity share capital		949.50	-	949.50
(b) Other equity
i. Reserves and surplus	1	21 ,526.25	13.14	21,539.39
Total equity		22,475.75	13.14	22,488.89
Non-current liabilities
(a) Financial liabilities
i. Borrowings	1	5,328.31	(20.09)	5,308.22
(b) Provisions		289.80		289.80
(c) Employee benefit obligations		1,212.39	-	1,212.39
(d) Deferred tax liabilities		1 ,558.37	6.95	1,565.32
Total non-current liabilities		8,388.87	(13.14)	8,375.73
Current liabilities
(a) Financial liabilities
i. Borrowings		644.48	-	644.48
ii. Trade payables		5,388.36	-	5,388.36
iii. Other financial liabilities		2,958.67	-	2,958.67
(b) Employee benefit obligations		247.02	-	247.02
(c) Other current liabilities		495.93	-	495.93
Total current liabilities		9,734.46	-	9,734.46
Total liabilities		18,123.33	(13.14)	18,110.19
Total Equity and Liabilities		40,599.08	-	40,599.08

cc Reconciliation of total equity as at March 31, 2017 and April 1, 2016

	Notes to first time adoption	31-Mar-17	1-Apr-16
Total equity (shareholders'' fund) as per previous GAAP		22,475.75	20,489.50
Ind AS adjustments
Borrowing - transaction cost adjustments	1,4	20.09	36.91
Proposed dividend & tax thereon			113.21
Deferred taxes on above Ind AS adjustments	1,4	(6.95)	(12.77)
Total adjustments		13.14	137.35
Total Equity as per Ind AS		22,488.89	20,626.85

cd Reconciliation of total comprehensive income for the year ended March 31, 2017

	Notes to first time adjustment	Amounts as per previous GAAP	Effect of transition to Ind AS	Amount as per Ind AS
Income
Revenue from operations		54,389.27	-	54,389.27
Other income		256.29	-	256.29
Other gains / (losses) - net		-	-	-
Total Income		54,645.56	-	54,645.56
Expenses
Cost of materials consumed		25,320.65	-	25,320.65
Purchases of stock-in-trade		4,762.62		4,762.62
Changes in inventories of work-in-progress, stock-in-traded finished goods		1,888.70	-	1,888.70
Excise duty on sale of Goods		3,005.35	-	3,005.35
Employee benefit expense	2	3,881.80	(124.61)	3,757.19
Power, Fuel & Water expenses		7,234.97	-	7,234.97
Net foreign exchange (gain)		(139.28)		(139.28)
Depreciation and amortisation expense		664.78		664.78
Other expenses		3,708.23	-	3,708.23
Finance costs		993.91	16.82	1,010.73
Total expenses (II)		51,321.73	(107.79)	51,213.94
Profit before tax & exceptional items		3,323.83	107.79	3,431 .62
Exceptional items		283.51	-	283.51
Profit before tax		3,040.32	107.79	3,148.11
Income tax expense
Current tax		700.00	-	700.00
Deferred tax	3	353.00	37.31	390.31
Total tax expense		1,053.00	37.31	1,090.31
Profit for the year		1 ,987.32	70.48	2,057.80
Other comprehensive income, net of tax		-	(81.48)	(81.48)
Total comprehensive income		1 ,987.32	(11.00)	1 ,976.32

ce Impact of Ind AS adoption on the statements of cash flows for the year ended March 31, 2017

	Amounts as per previous GAAP	Effect of transition to Ind AS	Amount as per Ind AS
Net cash flow from operating activities	8,441.42	(225.70)	8,215.72
Net cash flow from investing activities	(3,286.26)	-	(3,286.26)
Net cash flow from financing activities	(4,725.09)	7.69	(4,717.40)
Net increase /(decrease) in cash and cash equivalents	430.07	(218.01)	212.06
Cash and cash equivalents as at April 1 , 201 6	414.00	-	414.00
Cash and cash equivalents as at March 31 , 2017	844.07	(218.01)	626.06

cf Analysis of changes in cash and cash equivalents for the purposes of cash flows under Ind AS

	31 Mar, 2017	01 Apr, 2016
Cash and cash equivalents as per previous GAAP	844.07	414.00
GAAP adjustments	(218.01)	-
Cash and cash equivalents for the purpose of statement of cash flows	626.06	414.00

eg Notes to first time adoption Note 1 - Borrowings

The Compnay had, as per previous GAAP, charged transaction costs incurred in connection with borrowings to profit or loss in the year it acquired the borrowings. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

This has resulted in increase in retain earning as on transition date, i.e. 1st April 2016 by ? 36.91 lakhs, with corresponding reduction in borrowings. Consequently in the sbsequent year ended 31st March 2017, finance cost, calculated using effective interest rate was higher by Rs 16.83 lakhs.

Note 2 - Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2017 increased by Rs 119.35 lakhs. There is no impact on the total equity as at March 31, 2017.

Note 3 - Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as other comprehensive income include remeasurements of defined benefit plans and taxes thereon. The concept of other comprehensive income did not exist under previous GAAP.

Note 4 - Retained earnings

Retained earnings as at 1st April 2016 has been adjusted consequent to the above Ind AS transition adjustments.

NOTE 32 : DISCLOSURE FOR CHANGES IN FINANCIAL LIABILITIES (AS PER AMENDMENT TO IND AS 7)

Particulars	31-Mar-17	Cash flows	Non cash	31-Mar-18
			changes Fair value/
			Amortisation
			changes
Long term borrowings (Including current maturities)	6,596.10	(302.82)	12.20	6,305.48
shortterm borrowings	644.48	(509.44)	-	135.04
Total liabilities from financing activities	7,240.58	(812.26)	12.20	6,440.52

NOTE 33 : RECLASSIFICATION

Previous year figure''s have been reclassified to conform to this year''s classification.

The accompanying notes are an integral part of the financial statements As per our report of date attached

		For and on behalf of the board of directors of
		Pudumjee Paper Products Limited
For J M AGRAWAL & CO.	V. K. BESWAL	A. K. JATIA
Firm Registration No - 100130W	Director	Chairman
Chartered Accountants
Punit Agrawal	VINAY JADHAV	V. P. Leekha
Partner	Company Secretary	Managing Director
Membership No. 148757	H. P. BIRLA
Place : Lonavala	Chief Financial Officer	Place :Lonavala
Date :26lhMay, 2018		Date :26lh May, 2018

---

Mar 31, 2017

1. Salary, Wages, gratuity and bonus (Note ''20'') does not include a sum ofRs.126.12 lacs (Previous yearRs.95.22 Lacs) transferred to other accounts.

2.a) The company has leasehold land and building at Mahad Dist.Raigad. The leasehold land, colony and buildings are shown under Tangible Fixed Assets Schedule (Note No.10) and is appropriately amortized and depreciated for the year and Machinery and all other assets together with related expenditure have been shown under Capital work-in-progress.

3. In view of the Mahad project having been temporarily deferred, the borrowing and other recurring costs (net) incurred for the year aggregating toRs.276.37 lacs (Previous YearRs.204.36 lacs) have been treated as revenue expenditure and charged to the Profit & Loss account for the year under the respective heads.

4. In view of current power supply arrangement made through Open Access and with the proposed installation of 132 KV substation making the power available to Company at a significantly lower price, the economic viability of the power generating set together with the boiler has been impaired in view of the higher cost of power generated by it. Consequently an amount ofRs.283.51 Lacs being provision for impairment determined on the basis of estimated recoverable value of the Power Generating Set and Boiler is charged to profit and loss account.

5. Interest amounting to Rs. Nil (Previous yearRs.9.72 Lacs) and salaries & wages amounting toRs.12.01 Lacs (Previous yearRs.2.07 lacs), Rates & Taxes and Professional feesRs.26.93 lacs (Previous year Nil) and RentRs.16.14 lacs (Previous year Nil) have been capitalized during the year to Machinery under installation.

6. To the best of knowledge of the company, none of the creditors are ''Small enterprise'' within its meaning under clause (m) of section 2 of the Micro, Small and Medium Enterprises Development Act, 2006 & therefore principal amount, interest paid/payable or accrued is NIL.

7. Following significant accounting policies have been adopted in preparation and presentation of the financial statements:

8. These financial statements are prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis.

9. Goodwill is tested for impairment at every year end and provision, if any, will be charged to Profit & Loss Account.

10. Intangible Assets comprising of Product Branding/ Trademarks are amortized equally over a period of 10 years unless otherwise reviewed.

11. Fixed Assets are valued at cost.

12. Borrowing costs comprising interest etc. relating to projects unless deferred, are capitalized up to the date of its completion and other borrowing costs are charged to Profit & Loss Account in the year of their accrual.

13. Depreciation on Machinery & Building has been provided on Straight Line Method and that on the other Assets on Written Down Value method till 31-03-2014. The depreciation is provided on all the assets based on the useful lives of the assets on straight line method since then, in accordance with schedule II of the Companies Act, 2013. In conformity with the revised Accounting Standard "Property Plant & Equipment" (AS 10) spares having longer life than 12 months aggregatingRs.76.91 have been identified, capitalized (including unused lying in capital work in progress) and are depreciated when used over their estimated life as evaluated by technical personnel. Lease hold land is amortized based on period of residual lease.

14. Finished goods stock is valued at lower of cost or market value. All other inventories are valued at lower of cost on First In First Out Method or realizable value.

15. Investments are classified into current and long term investments. Current investments are stated at lower of cost or fair value. Long term investments are stated at cost, less provision for permanent diminution in value, if any.

16. Contributions to defined contribution schemes, namely, Provident Fund and Superannuation Fund is made at a pre-determined rates and are charged to the Profit & Loss Account.

17. Contributions to the defined benefit scheme, namely, Gratuity Fund & provision for the remaining Gratuity, Pension and for Leave encashment are made on the basis of actuarial valuations made in accordance with the revised Accounting Standard (AS) 15 at the end of each Financial Year and are charged to the Profit & Loss Account of the year.

18. Actuarial gains & losses are recognized immediately in the Profit & Loss Account.

19. Foreign Exchange Transactions are recorded at the then prevailing rate. Closing balances of Assets & Liabilities relating to foreign currency transactions are converted into rupees at the rates prevailing on the date of the Balance Sheet. The difference for transactions are dealt with in the Profit & Loss Account.

20. Lease arrangement where the risks and rewards incidental to ownership of an assets substantially vest with the lessor, are recognized as operating leases,. Lease rentals under operating leases are recognized in the statement of Profit & Loss.

21. Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Sales are recognized when significant risk and rewards of ownership of the goods have passed to the buyer which coincides with delivery/transfer and are recorded net of trade discounts. Interest income is recognized on time basis taking into account the amount outstanding and the applicable rate.

22. Factors giving rise to any indication of any impairment of the carrying amount of the company''s assets are appraised at each balance sheet date to determine and provide /revert an impairment loss following accounting standard AS 28 for impairment of assets.

23. Contingent Liabilities are not recognized, but are disclosed in the notes based on substantial degree on estimation. Contingent Assets are neither recognized nor disclosed in the financial statements.

24. The Deferred Tax Asset in respect of carry forward of losses and tax credit has been worked out on the basis of assessment orders, returns of income filed for subsequent assessment years and estimate of taxable income for the year ending 31^st March, 2017.

25. A dividend at the rate ofRs.0.15 (per equity share ofRs.1 fully paid) for the year 2016-17 aggregating toRs.142.42 lakhs has been recommended by the Board of Directors for declaration at the ensuing Annual General Meeting. A corporate tax on such dividend amounting toRs.28.99 would become payable upon declaration of the dividend by the said Annual General Meeting and not provided in the accounts in conformity with the Accounting standard (AS 4) as revised.

26. Related party disclosures (Accounting Standard 18) :

27. Associate Firms / Companies

28. Pudumjee Industries Limited.

29. Pudumjee Plant Laboratories Limited.

30. Pudumjee Hygiene Products Limited.

31. Pudumjee Holding Limited.

32. Pudumjee Investment & Finance Co.Ltd.

33. Pudumjee Pulp & Paper Mills Limited.

34. G: Corp Township Private Limited.

35. Key Management Personnel Shri. V. P. Leekha

Managing Director

Dr.Ashok Kumar

Executive Director

Shri. H. P. Birla

Chief Financial Officer

Shri. Vinay Jadhav

Company Secretary

36. The Company had entered into lease/ leave & license agreements (including leave & license agreement pursuant to the scheme) for commercial use on terms and conditions as specified in their agreements for period ranging from 11 months to 10 years by placing refundable deposits. In respect of these agreements the future minimum lease/ rental payment is as under :

37. The following are the disclosures required under revised Accounting Standards (AS) 15 in respect of Employee Benefits :

38. An amount ofRs.230.01 lacs (Last yearRs.198.29 lacs) has been recognized as an expense for defined contribution plans by way of Company''s contribution to Provident Funds & Super annotation Fund.

39. The defined benefits plans comprise of Gratuity Plan and Leave Encashment Plan.The Gratuity Plan is partly funded with Life Insurance Corporation of India under its Cash Accumulation Plan setup & shared by Pudumjee Pulp and Paper Mills Limited and Pudumjee Industries Limited, pending transfer of fund to company setup fund.

In addition, a pension / Family pension liability on the basis of actuarial valuation has been provided in respect of one director of the company. The pension payable will crystallize on his leaving service & family pension after his death to his spouse. The actuary has assumed rate of interest at 8% p.a.in the valuation of pension / family pension liability & the LIC annuitants mortality (2006-08) ultimate , table. J

40. Disclosure of the details of specified Bank Notes (SBN) held and transacted during the period from 8^th November, 2016 to 30^th December, 2016, required as per Notification G.S.R.308 (E) dated 30^th March, 2017 issued by the Ministry of Corporate Affairs.

41. The items and figures for the previous year have been recast and regrouped wherever necessary to conform to this year''s presentation.

---

Mar 31, 2016

Notes:

(a) Excluding Rs, 427.78 lacs shown under “Current maturities of Long Term Debt” under Note No. 8.

Repayable in 18 equal quarterly installments beginning with 04.02.2013.

(b) Excluding Rs, 500.00 lacs shown under "Current maturities of Long Term Debt “under Note No.8.

Repayable in 20 equal quarterly installments beginning with 16.01.2014.

(c) Excluding Rs, Nil shown under "Current maturities of Long Term Debt “under Note No.8.

Repayable in 12 equal quarterly installments beginning with 30.04.2017.

(d) Excluding Rs, 7.67 lacs shown under "Current maturities of Long Term Debt" under Note No.8.

Repayable in 59 Monthly installments beginning with 10.1.2014.

(e) There has been no default in repayment of Loan & Payment of Interest in respect of any of aforesaid borrowings.

*Security: Also First charge on Land & Buildings at Pune of Pudumjee Pulp & Paper Mills Ltd, till its release (also refer Note No.23.08 )

Notes :

(a) Excluding (i) Rs, 35.21 Lacs being deposits for 1 year shown under "Short Term Borrowings"

under Note No 6, and (ii) Rs, 763.37 lacs shown under "Current maturities of Long Term Fixed Deposits" under Note No.8.

(b) Excluding Rs, 195.22 lacs shown under "Current maturities of "Long Term Unsecured Debts" under Note No.

8.

(c) There has been no default in repayment of Loan & Payment of Interest in respect of any of aforesaid borrowings.

* Repayable after 2 years and 3 years from the date of acceptance of each Deposits.

23.08 Scheme of Arrangement -

I) Pursuant to the Scheme of Arrangement (“the Scheme”) between Pudumjee Pulp & Paper Mills Ltd. (PPPML), Pudumjee Industries Ltd (PIL), Pudumjee Hygiene Products Ltd (PHPL), the Company and their respective shareholders and creditors as approved by the High Court of Mumbai vide its order dated 8^th January, 2016, which became effective on 1^st February, 2016 (effective date) on filling with the Registrar of Companies, all the assets and liabilities of the Paper Manufacturing Business of PPPML & PIL and hygiene products business of PHPL have been transferred to the company at their respective book values on a going concern basis with effect from the appointed date (i.e 1^st April, 2014). Accordingly, the Scheme of Arrangement has been given effect to in these accounts. The details of Assets & Liabilities, as on 1^st April,2014, transferred from PPPML, PIL and PHPL to the Company are as under :

II) In consideration, the company has issued and allotted 9,44,50,000 equity shares of Face Value of Rs, 1 each (of the fair value of Rs, 20/- as determined in the Valuation Report issued by SSPA & Co., Chartered Accountants ), to the Share holders of PPPML, PIL and PHPL as under -

The above shares have been allotted to the Shareholders of the respective companies whose names appeared in the register of members of the respective companies as on the record date on 12^th February, 2016.

Consequent to the issue and allotment of shares , pursuant to the Scheme, the Company ceased to the subsidiary of PPPML. Shares of the Company have been listed on National Stock Exchange & Bombay Stock Exchange on 30^th March, 2016.

III) Pursuant to the Scheme, the Company has (i) credited to Share Capital Account, the aggregate face value of the Shares issued and allotted by it and (ii) credited to Capital Reserve Account, the excess of the aggregate fair value of the shares allotted over their face value. The excess of aggregate of share capital and capital reserve over the net asset value (Asset minus Liabilities) transferred to the company, has been debited to Goodwill as under : -

*Excluding Demerger Expenses of Rs, 237.39 Lacs which has been debited to Goodwill as per the Scheme.

IV) The transactions between the appointed date (i.e. 1^st April,2014) and up to the effective date (i.e. 1^st February, 2016) as appearing in the books of accounts of demerged undertakings of PPPML, PIL and PHPL have been deemed to have been made by the Company and the demerged companies have carried out those business and activities for and behalf of the Company.

V) The net profit after tax of the demerged undertakings, for the period from the appointed date i.e. 1^st April, 2014 to 31^st March, 2015 (i.e. last financial year) of Rs, 599.63 lacs has been adjusted in Reserves & Surplus .

VI) All costs, charges and expenses including stamp duties arising out of or incurred so far in carrying out and implementing this Scheme and matters incidental thereto, have been borne by the company. All such expenses have been debited to Goodwill account as per the Scheme, excluding stamp duty payable on the assets transferred, amounting to Rs, 316.73 lacs, debited to the respective assets.

VII) The secured loans and facilities concerning demerged undertakings stand transferred to the Company along with the security created there for on the assets transferred to the Company. pending sanction of new working capital facilities to the Company by the Banks and creation of security documents. However the security, (for those facilities and also, wherever applicable, for Term Loans) whether by way of first charge or the second charge on other assets (namely Land and Buildings at Pune of Pudumjee Pulp & Paper Mills Ltd. (PPPML) & Pudumjee Industries Ltd (PIL) and machinery of Pudumjee Hygiene Products Ltd(PHPL) which have not been transferred to the Company, continues to subsist in favour of the lenders for their loans (as per the respective agreements initially executed by PPPML or PIL or PHPL in favour of the lenders while availing the loans) till appropriate agreements are executed.

Relevant sanction and documents are being worked out and pending finalization and execution thereof, the Cash Credit and Term Loan Accounts are being operated upon for the Company and all applicable obligations are being fulfilled by the company.

VIII) Although pursuant to the scheme of arrangement, the immovable properties at Mahad, belonging to the demerged undertaking of PPPML vested in and/or deemed to be transferred to and vested in the Company, the mutation of title of leases thereof in the name of the Company is yet to be made and recorded by the appropriate authorities. Further in some cases of other Non Current & current assets and bank accounts transferred to the company, the name of the Company is yet to be registered. Notwithstanding the same, the Company exercises all rights and privileges and fulfills all obligations, in relation to or applicable to such immovable properties and other Non Current & Current Assets, bank accounts & liabilities.

IX) The figures stated in the current year are not comparable with those of previous period for the reason that (a) the figures for the previous period were since incorporation of the Company on 14^th Janaury, 2015 ; and (b) in the current year, effect has been given to Scheme of Arrangement as approved by Bombay High Court & (c) the net profit after tax of the demerged undertakings, for the period from the appointed date i.e. 1^st April, 2014 to 31^st March, 2015 (i.e. last financial year) of Rs, 599.63 lacs has been adjusted in Reserves & Surplus as stated earlier.

X) Revenue & Expenses for the year 2015-16 are gross i.e. inclusive of the revenue and expenditure amongst demerged undertakings for the period from 1^st April, 2015 to 31^st January, 2016 .

XI) Pursuant to the scheme of arrangement, employees of the demerged undertaking as on effective date stand transferred to the company with effect from appointed date on the same terms and conditions on which they were employed in Demerged Company.

Consequently all benefits including Provident Fund, Gratuity Fund, Superannuation Fund created for the benefit of the such employees of the demerged undertakings stand transferred.

XII) The scheme provides that the Capital Reserve created as aforesaid will be treated as part of paid-up share capital for the purpose of Chapter V of the Companies Act, 2013 and Companies (Acceptance of Deposit) Rules, 2014.

1. Salary, Wages, gratuity and bonus (Note ''20'') does not include a sum of Rs, 95.22 lacs transferred to other accounts.

2. a) The company has leasehold land, building and board manufacturing machine at Mahad Dist.Raigad.

The leasehold land, colony and buildings are shown under Tangible Fixed Assets Schedule (Note No.10) and is appropriately amortized and depreciated for the year and Factory Building, Machinery and all other assets together with related expenditure have been shown under Capital work-in-progress.

b) In view of the aforesaid expansion project having been temporarily deferred, the borrowing and other recurring costs (net) incurred for the year aggregating to Rs, 204.36 lacs have been treated as revenue expenditure and charged to the Profit & Loss account for the year under the respective heads.

3. Interest amounting to Rs, 9.73 Lacs and salaries & wages amounting to Rs, 2.07 Lacs have been capitalized during the year to Machinery under installation.

4. Following significant accounting policies have been adopted in preparation and presentation of the financial statements:

(b) The Deferred Tax Asset in respect of carry forward of losses and tax credit has been worked out on the basis of assessment orders, returns of income filed for subsequent assessment years by the transferor companies named in the scheme of Arrangement and estimate of taxable income for the year ending 31^st March, 2016.

5 A Dividend of '' 0.10 per equity share of Rs, 1/- each has been proposed for the current year amounting to Rs, 94.95 lacs excluding Rs,18.26 lacs of dividend Distribution tax.

6 Related party disclosures (Accounting Standard 18) :

A) Associate Firms / Companies

a) Pudumjee Industries Limited.

b) Pudumjee Plant Laboratories Limited.

c) Pudumjee Hygiene Products Limited.

d) Pudumjee Holding Limited.

e) Pudumjee Investment & Finance Co.Ltd.

f) Pudumjee Pulp & Paper Mills Limited.

B) Key Management Personnel Shri. V. P. Leekha Managing Director

Shri. H. P. Birla Chief Financial Officer

Shri. Vinay Jadhav Company Secretary

D) The remuneration (including provision for Gratuity and Pension determined on actuarial basis) to the Managing Director, Mr. Ved P. Leekha amounting to Rs, 148.04 lacs includes the remuneration paid by Pudumjee Pulp & Paper Mills Ltd (PPPML) up to 31.01.2016 in respect of its undertaking demerged into the Company. The said remuneration was in accordance with the approval given by the Shareholders of PPPML. By virtue of the scheme the said remuneration stands transferred to the Company. Therefore, the remuneration paid/payable to Mr. Ved P. Leekha from 01.02.2016 is subject to approval by way of Special Resolution.

The Paper segment relates to manufacture and marketing of Paper, processing activity. Hygiene division segment relates to marketing and distribution of Hygiene and other Products.

7. The Company had entered into lease/ leave & license agreements (including leave & license agreement pursuant to the scheme) for commercial use on terms and conditions as specified in their agreements for period ranging from 11 months to 10 years by placing refundable deposits. In respect of these agreements the future minimum lease/ rental payment is as under :

All such lease payments for the year are recognized in Profit & Loss Account as rent paid.

8. The following are the disclosures required under revised Accounting Standards (AS) 15 in respect of

Employee Benefits :

a) An amount of Rs,198.29 lacs (Last year Rs, Nil) has been recognized as an expense for defined contribution plans by way of Company''s contribution to Provident Funds & Super annotation Fund.

b) The defined benefits plans comprise of Gratuity Plan and Leave Encashment Plan. The Gratuity Plan is partly funded with Life Insurance Corporation of India under its Cash Accumulation Plan setup & shared by Pudumjee Pulp & Paper Mills Limited and Pudumjee Industries Limited, pending transfer of fund to company setup fund.

In addition, a pension / Family pension liability on the basis of actuarial valuation has been provided in respect of one director of the company. The pension payable will crystallize on his leaving service & family pension after his death to his spouse. The actuary has assumed rate of interest at 8% p.a.in the valuation of pension / family pension liability & the LIC annuitants mortality (2006-08) ultimate table.